Farmers, ranchers want Cuba

NEW ORLEANS — The farm lobby is using President Barack Obama's easing of
some travel restrictions to Cuba as an opportunity to push for increased
sales of rice, meat, vegetables and other goods to the island nation.

Congress cleared the way for Cuba to buy U.S. agricultural commodities
in 2000. But groups such as the USA Rice Federation say a 2005
interpretation of the law by an arm of the Treasury Department,
requiring payment before goods were shipped, severely restricted sales.

"More and more in Congress feel the Cuba (trade) policy has served its
time and it's time for new and better ways to deal with" it, said Jamie
Warshaw, federation chairman and a rice mill operator in Lake Charles, La.

At least 15 senators have joined agricultural groups in calling for
greater trade with Cuba, including Montana Sen. Max Baucus, chairman of
the Senate Finance Committee. He plans to introduce legislation to make
it easier for U.S. farmers and ranchers to do business with Cuba.

Cuba was the top U.S. rice export market before the 1962 embargo. The
industry believes if restrictions were eased, the island market could
reach 400,000 metric tons a year or better for rice growers in Arkansas,
Louisiana, Texas, Missouri and Mississippi.

If realized, Cuba could become the United States' No. 2 rice export
market, well behind Mexico but firmly ahead of Venezuela. It also could
mean business for Gulf ports, such as New Orleans, which once counted
Cuba as a leading trade partner.

It's unclear, however, how Cuba would react.

The Department of Agriculture said in a March 2008 report that officials
with the Cuban agency handling U.S. food imports are "somewhat
apprehensive about allowing the United States to provide a significantly
larger proportion of Cuba's food import requirements."

Richard Fontenot, a rice grower near Ville Platte in south Louisiana,
said freer trade would give U.S. rice producers a "definite advantage"
over competitors in Thailand or Vietnam.

In March, the Office of Foreign Assets Control said it did not plan to
revisit the Bush administration's interpretation of the 2000 Cuba-trade law.

Before the ruling, Cuban buyers would begin payment of goods once they
were shipped from a U.S. port, routing the payments through third-party
banks. There were no reports of buyers taking possession of shipments
before completing payments, the 15 senators told Treasury Secretary
Timothy Geithner in a March letter.

The senators said that practice worked well and have asked Geithner to
change the Bush interpretation, which they believe could allow
agricultural sales to Cuba at more robust levels.

Rice exports to Cuba fell from about 176,630 metric tons in 2004 to less
than 13,000 metric tons in 2008, the federation said.

U.S. agricultural exports to Cuba averaged more than $350 million a year
between 2004 and 2006 before hitting $691 million last year. Parr
Rosson, a Texas A&M University agricultural economist and director of
its Center for North American Studies, attributes the spike in dollar
value in part to factors such as the hurricanes that devastated Cuba in
2008 and the lower value of the U.S. dollar.

For the first two months of 2009, agriculture sales to Cuba were about
$6 million lower than in the same period in 2008. Flynn Adcock, the
center's international program coordinator, said it's difficult to say
whether this year's sales will top last year's, given the global
economic woes, but said it's possible to at least near last year's levels.

Rosson said sales for agricultural commodities and goods to Cuba — meat,
rice, Northern-produced peas, corn, soybeans and dairy products, among
them — could top $1 billion, if restrictions were relaxed.

Even with the Bush policy change, the United States remained Cuba's most
important food and agricultural product supplier, accounting for more
than a quarter of such imports, according to the U.S. Department of
Agriculture.

A more open market would likely give U.S. rice exporters an advantage
over competitors such as Vietnam. Mostly that's because Cuba is near
major shipment locations such as south Louisiana, cutting shipping costs
and time to market.

Roger Johnson, former North Dakota agriculture commissioner who said he
has visited Cuba eight times, said the trade embargo has been a
"disastrous policy" that no longer makes sense.

"We ought to be selling more food. We ought to be removing the barriers
to selling food," said Johnson, now head of the National Farmers Union.

But he also said he understands diplomacy and the need for
give-and-take, from Cuba, too.

While some farm groups want trade normalized, they acknowledge that
isn't likely to happen soon.